1. Technical Field
This disclosure relates to predictive analytics in the pharmaceutical industry. In particular, this disclosure relates to predicting the likelihood of success of a real-world pharmaceutical transaction based on analysis of prior pharmaceutical transactions.
2. Background
Pharmaceutical companies often venture outside of their own organizations in search of new assets to develop in their pipeline and to ultimately bring to market. These deals may be in the form of a purchase, license, joint development, strategic arrangement, or other business transaction. However, the key factors and conditions that predict and quantify a successful business transaction or relationship have not been established. Typically, pharmaceutical industry experts have relied on relationships, qualitative evidence, intuition, or experience-based “rules of thumb” when establishing licensing programs or collaborative arrangements. However, there has been no quantitative evidence to prove that any of these techniques are successful in selecting deals that create more value. Reliance on such factors does not necessarily increase the probability that the transaction will be successful. An unmet need exists to identify and quantify the factors and conditions that correspond to successful pharmaceutical business transactions or relationships.
The pressure on pharmaceutical companies to achieve high performance and deliver new products has never been greater. With revenues eroding because of expiring patents and generic competition, companies are in a collective scramble to acquire new compounds. In search of the next innovation, companies have been through a decade of whirlwind deal-making to bring in products from external sources. Whether through licensing or more elaborate business development investments, the number and value of these deals are only expected to increase.
However, only a small portion of these deals result in successful products. To increase the success of these efforts to feed the pipeline, companies have two strategic options. The pharmaceutical companies can either engage in more deals, or they can become increasingly selective and engage in fewer deals. The pharmaceutical industry now relies heavily on the first strategy—raising its level of investment in the hope of yielding a higher absolute number of successful products. Because there are limited resources for investing in new deals, there is a need for a tool that can assist pharmaceutical companies to be more selective, and to engage in fewer deals that have a higher probability of successful returns.